BTC/USD Forex Signal: 2020 has seen solid long-term buying

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Bitcoin: Bullish above $8,800

 

Yesterday’s signals were not triggered as there was insufficiently bearish price action at either of the resistance levels which were reached.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades may only be entered before 5pm Tokyo time Wednesday.

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $8,966, $8,802, $8,683, or $8,504.
  • Place the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is $50 in profit by price.
  • Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.

Short Trade Ideas

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $9,233 or $9,489.
  • Place the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is $50 in profit by price.
  • Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

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BTC/USD Analysis

I wrote yesterday that the picture had become more bullish as the price had risen quite firmly after bouncing from the support level I had identified at $8,216. However, I suspected that the bullishness would run out of steam and the price would now range between the nearest support and resistance levels.

I was wrong about the ranging and I would have done better to have more confidence in the bullish move, which is unusual for Bitcoin within a generally risk-off market environment. It shows unusual strength and that is a bullish sign for Bitcoin.

The price is now resting on new support at $8,966 after making a double top near $9,200 followed by a normal bearish retracement. As long as this level holds, the outlook is bullish. I would even say its still quite bullish above $8,802 and I would be happy to take a bullish bias if we get a healthy bounce following a retracement to that level.

BTC/USD

Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy